Even as early as 1911, Australia had a reasonably high level of home ownership, about half (49%) of all households either owning or purchasing their own home. Since that time a broad mix of economic, social and political factors have influenced the housing tenure choices and options of Australian families.

In particular, accessibility to affordable and secure housing has long been recognised by successive Australian governments as being interlinked with strong economic growth and development. Subsequently, at both Commonwealth and State levels, governments have given high priority to housing policies and programs; through various incentive and assistance schemes, governments have had a considerable influence on the patterns of tenure depicted in graph 8.9.

HOME OWNERSHIP INCENTIVE SCHEMES

Early Commonwealth government schemes, such as those developed in the 1920s to encourage home ownership, fell on hard times. This can be attributed to several factors such as constitutional difficulties and the economic effects of the Great Depression and World War II. As a result, home ownership levels increased only slightly over that period, reaching 53% by 1947.

Following the creation of the Commonwealth Housing Commission (CHC) in 1944 and the first of many Commonwealth State Housing Agreements (CSHAs) in 1945, policies encouraging home ownership have been given high priority. Home ownership has been promoted through the provision of grants or guaranteed loans to building societies and banks to finance construction of owner occupied homes and to provide increases in the amount of finance available for housing purposes. In addition, both Commonwealth and State Governments have, at various times, provided direct incentives and grants to home buyers. Examples of these include low interest loans, grants to first home buyers and low deposit 'start-up' schemes. All of this meant that, by the early 1970s, Australia had the second highest rate of home ownership in the developed world, coming second to only to Iceland.1 When the Capital Gains Tax was introduced in the 1980s, exemptions were made for the profits made from the sale of the family home.

Since peak levels in the mid 1960s, there has been a slight decline in the proportion of households owning or purchasing their own home. There are a number of possible explanations. Social changes, such as people marrying later and delaying to have children, may cause subsequent delays in the timing of decisions to purchase a home. In addition, labour market reforms, which have resulted in a more mobile labour force and reduced certainty of employment, may have impacted on people's housing decisions. Also, the high interest rates of the 1980s made housing less affordable, while in the 1990s, rates of appreciation (price increase) of dwellings slowed in many areas and were even negative in some regions. As a result, it is possible that owner occupation was less likely to be viewed as the 'good investment' it once was, with some people opting to rent rather than buy a home and to seek alternative investments.

PUBLIC (RENTAL) HOUSING

The provision of low cost, subsidised public housing was recognised early as an essential complement to home ownership incentives and schemes.

After some earlier, tentative starts in Victoria and New South Wales, the large scale provision of public rental housing for both moderate and low income earners got underway after World War II. Since the mid 1940s, the Commonwealth Government has facilitated, through successive CSHAs, the growth (in numbers) of subsidised rental housing-usually through the provision of loans to participating States, with low interest rates and long repayment periods. Continuing into the mid 1990s, the emphasis has largely been on retaining public housing levels. For example, as stock was upgraded and sold off, earnings were usually pooled back into the purchase of replacement stock. Through measures such as these, the proportion of public housing stock has remained remarkably constant, at around 5%, since the mid 1960s. Indications are, however, that absolute numbers are now starting to decline. As with directions in other areas of public infrastructure, Commonwaelth and State Governments are moving to reduce their levels of investment in public housing.

PRIVATE RENTAL ASSISTANCE SCHEMES

Since the late 1970s, the Commonwealth Government has broadened its involvement in private rental assistance programs, progressively widening the range of persons eligible for assistance through such schemes. It has also increased the amount of assistance available to individuals and families. (For more information on the private rental assistance scheme, see the section Housing assistance.)

Investment in the private rental market has also been encouraged, largely through the provision of tax breaks such as depreciation and negative gearing of rental properties.

ENDNOTES

1Housing Australia: A Statistical Overview, 1992(1320.0).

2 In addition to unpublished data from the Census of Population and Housing for 1971, 1976, 1981, 1986, 1991 and 1996, data for the graph and text in this article were drawn from a range of publications relating to Censuses between 1911 and 1996.